AGT - is mining gold what do you think of the chart?
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Apollo Gold Corporation ("Apollo" or the "Company") (TSX: APG) (AMEX: AGT) is pleased to report that the mill at its Montana Tunnels mine (the "Mine"), which is located near Helena, Montana, has commenced production. The Mine is a 50/50 joint venture with Elkhorn Tunnels, LLC ("Elkhorn"), an affiliate of Calim Private Equity LLC ("Calim"), with Apollo acting as the manager of the Mine.
Consistent with our previously announced schedule, the Montana Tunnels mill was placed into service on March 1, 2007. The mill consists of crushing and grinding circuits followed by gravity gold, flotation and filtration circuits. The mill is expected to operate at an average of 15,000 tons per day for the balance of 2007. The products expected to be produced will be gold and silver dore, a lead-silver-gold concentrate and a zinc-silver-gold concentrate. Both concentrates will be transported via rail to the Teck-Cominco smelter located at Trail, British Columbia, Canada. The dore will be refined in Salt Lake City by Johnson Matthey Inc. Refineries.
The pit wall stabilization work and the construction of a new haulage ramp, which were started approximately seven months ago, were completed in January 2007. Since then, we have continued to move waste rock from the pit bottom to expose the ore body and stockpile some lower grade ore alongside the mill. As at February 28, 2007, there were 333,000 tons of lower grade material and 45,000 tons of reserve grade ores stockpiled alongside the mill for future processing. During 2007, ore delivery from the Mine to the mill is expected to exceed mill capacity, which would result in an increase in the stockpiles.
As at December 31, 2006, the ore reserves at the Mine were 35.69 million tons containing 551,669 ounces of gold and 414.0 million pounds of zinc. The grade model was not modified in 2006 as no new definition drilling was conducted during the year. The following table summarizes the proven and probable reserves.
Proven and Probable Reserves Dec. 31, 2006 Montana Tunnels
Pit Classification Tons Au Ag Pb Zn Au
Design Ounces
--------- ------------------------- ------- --------------------------
L-Pit Proven 10,357,546 0.0159 0.169 0.219 0.587 164,916
--------- ------------------------- ------- --------------------------
Probable 214,402 0.0151 0.180 0.209 0.509 3,236
--------- ------------------------- ------- --------------------------
--------- ------------------------- ------- --------------------------
Total 2P Reserves 10,571,948 0.0159 0.170 0.219 0.585 168,152
--------- ------------------------- ------- --------------------------
--------- ------------------------- ------- --------------------------
Total M- Probable
Pit 25,120,423 0.0153 0.227 0.166 0.578 383,517
--------- ------------------------- ------- --------------------------
--------- ------------------------- ------- --------------------------
Total 2P Reserves
Reserves 35,692,371 0.0155 0.210 0.181 0.580 551,669
--------- ------------------------- ------- --------------------------
The above ore reserves were calculated using the past three years average metal prices: Gold -$485/oz., Silver - $8.50/oz., Lead - $0.47/lb., and Zinc - $0.87/lb. The above reserves conform to the Standards of the Canadian National Instrument 43-101.
David Russell, President and CEO of Apollo, said, "I am very happy with the timely and smooth start of the Montana Tunnels mill. The Montana Tunnels management and workforce have worked hard on this remediation project over the past seven months. They have met all their development goals and timeframes to date. With the mill starting on schedule, the Mine personnel have shown that their plans were developed properly and executed correctly. We are now looking forward to future production at the Mine."
Patrick Imeson, President and CEO of Calim, stated, "We are very pleased with the start-up at the mill and progress to date and believe the Mine to be a great asset with capable management and operational capability. Our strategy is to search out niches where we can develop undervalued opportunities, that larger players in an industry have overlooked or are unable to exploit, and Montana Tunnels is such an asset."
Apollo Gold Corporation
Apollo is a gold mining and exploration company with a mine as described above as the Montana Tunnels Mine, the Black Fox advanced stage development project in Ontario, Canada, and the Huizopa Project, an early stage exploration project in the Sierra Madres in Chihuahua, Mexico.
Calim Private Equity, LLC
Colorado-based, Calim Private Equity LLC focuses on investment and company development opportunities created by new technologies, expanding markets or underdeveloped assets.
This press release has been reviewed and approved for release by Richard Nanna, Professional Geologist, Apollo's Senior Vice-President, Exploration and Development and designated "Qualified Person" under NI 43-101.
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